[PPT] - HERMANUSDOORNS SHAREBLOCK LIMITED A NNUAL G ENERAL M EETING 11 A PowerPoint Presentation

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HERMANUSDOORNS SHAREBLOCK LIMITED

ANNUAL GENERAL MEETING 11 AUGUST 2018

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11 August 2018 - AGM AGM 2018

AGENDA

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Welcome
Attendance Register
Notice Convening the Meeting and Quorum

– Appointment of Referee and assistant to administer and count votes

Apologies and Proxies
Appointment of Vote Counters

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AGENDA … cont

Report Back including:

– Overview of the Company – Ordinary Resolutions 1 to 3

– Special Resolutions 1 and 2

General
Closure
Lunch – directly after the meeting

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Respect to Passing Shareholders

Observe a minutes silence
A couple of shareholders or family members

passed away during the last year

– Johan Wessels – Daan Botha

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Welcome to new Shareholders

Welcome to new members

– Willem Davel & family – Francois van der Merwe & family – Fritz Van Der Westhuizen & family

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A Celebration

This is our 21st Birthday as a Shareblock
Happy Birthday to Hermanusdoorns in

becoming of Age

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Minutes of AGM of 12th August ‘17

Ordinary Resolution 1

– Resolved as Ordinary Resolution 1 to approve the minutes of the previous Annual General Meeting held on 12th August 2017

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MD’s Report

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Key issues addressed by the Board

– Financial Position – Stakeholder Issues – Corporate Governance – Infrastructure and Asset management – Human Capital – Services provision – Fauna and Flora

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Intro and some Background

Board has managed expenses within the budget, while

allocating capital resources to much needed projects

The past year, as was the prior year, has been primarily

focused on Infrastructure Improvement

– Replacement of the Western Fence into the mountain – Joint Venture with neighbour to repair the fence at the back of the farm – Restoration of the second assistant Farm managers house – Continued Sekelbos removal – Increased investment in specialized tools to reduce maintenance costs – Hammer mill to assist feed preparation – Building of viewing Deck at Dam near old windmill – Replacing the hide at Waterbokpan

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Intro and Background

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Continued focus and improvement on

controls

– Expenses – Security – Asset utilization – Capital Expenditure

Policy and Procedure entrenchment

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Financial Position

Operational Finances remain extremely healthy

– Continued focus on the 5 key expenses that account for 90% of our cost base:

Salaries
Well under control
Utilities
Consumption steadily declining

Will utilize more solar in future

Vehicles
Policy to replace old vehicles shown

good results.

Maintenance
Well controlled
Capex
Good progress on “Big Ticket items”

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Late Debtors Trend

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Late Levies

Late levies (Services excluded)

– At 31 March Debtors were R 542k

last year they were R 274k

– As at 31 July they were still R 222k

Last year they were R209k
Trend line reversing!
We will continue with legal action until

prosecution for ALL defaulters

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Late Levies

Late Levy payment have been a reality over the past years
At previous AGM’s it was agreed to adopt a “ZERO TOLERANCE” approach

following on the previous AGM decision to “name and shame”

Remember 31 March is the Deadline
Defaulters with possible legal action

– Brian Moore – Multiple Offender – Dawid Botha – Multiple Offender – Jan Swanepoel / Lieb vd Walt – Multiple Offender – Pieter van den Ben – Multiple Offender – Ronnie Van As – Dalema Tobacco

We will prosecute to finality, possibly with an auction to recover Company

monies and DENY ACESS to the farm if in arrears

All Outstanding monies as of 31 March will be levied interest at the usury rate!

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Financial Position

The following slides

– Reflect the financial status of the company – Show that the company is in a sound state – and continues to grow stronger each year – Illustrate that the company is well managed and expenses are under control

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A

Balance Sheet Items Please Refer to Page 10 of the AFS

A) Good Cash Position = R 1.2m
B) Loss – continuously declining

❑Remember assets write off

f R 12.6m as part of new

accounting rules

B

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D E

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F G

Income Statement Issues Please Refer to Page 11 of the AFS

D

Static Levy Revenue

E Decreasing “Other Income”
F

Deficit on Operating line of R42.0k

G

Total Surplus of R 18k for the year

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Application of Funds

2017/8 Actual

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Income Statement Highlights Refer to page 25 of AFS

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Expense Control

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2019/20 2018/9 2017/8 2016/7 2015/6 Budget Forecast Actual Actual Actual Op Ex 2,361,629 2,227,941 2,203,147 2,069,490 1,866,990 Capex 525,000 525,000 497,395 621,372 863,482 Game 75,000 125,000 130,666 31,542 16,211 Total 2,961,629 2,877,941 2,831,208 2,722,404 2,746,683 Growth on Prior Year 2.9% 1.7% 4.0%

0.9%

Overall Expense Growth

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Income Statement Highlights

Refer to page 23 and 25
Employee costs

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Detail %

Employee costs 1,039,069 1,014,217 2.5% Recoveries (255,954) (291,327) (12.1%) Cleaning 126,585 126,414 Alarm 20,433 31,999 Shareholder Stuff 99,891 108,698 Snoepie 9,045 24,216 Real Employee Costs 783,115 722,890 8.3%

2016/7 2017/8

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Income Statement Highlights

Refer to page 25
Admin and Auditing

– Actual Up by 1.7%

Motor Vehicle Costs

– Actual Down by 1.8%

Repairs and maintenance

– Actual up by 64% as we continue to overhaul infrastructure

Utilities

– Down by 8% as we switch to lower energy devices

Insurance

– Down by 22% as a result renegotiated contract

Employee Costs

– Up 2.5%

ALL in ALL – Very Reasonable

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Income Statement Highlights

Refer to page 25
Electricity

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Detail 2017/8 2016/7 ∆ %

Electricity Costs 380,222 414,725 (8.3%) Recoveries (227,324) (209,399) 8.6% Real Electricty Cost 152,898 205,326 (25.5%)

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Profit Bridge

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Detail 2018 2017 2016 2015

Operating Income (Loss) for the Year (Excl CAPEX) 646,404 762,079 920,650 708,982 Capital Expenditure and Game Costs 628,061 652,914 863,482 618,787 Operating Income (Loss) for the Year 18,343 109,165 57,168 90,195

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Income Statement Highlights

Refer to page 23
Capex (R 439k) down on prior year but offset

by higher maintenance

Should remain at about R 600k to protect

the asset base

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Capex and Trend line

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Approximately R600k required to invest on an annual basis to protect the farm asset

Detail 2017/8 2016/7

Fencing 60 748 147 200 Infrastructure 191 318 291 911 Farm Equipment 70 517 31 578 Furniture and Fittings 13 112 17 883 Farm House Renovation 161 700 132 800 Total Capex for Year 497 395 621 372

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Financial Position

The Financial Statements have been

discussed in detail at various meetings of the Financial Reporting Committee and have recommended these for adoption

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Adopting the AFS

Ordinary Resolution 2

– Resolved as Ordinary Resolution 2 to receive and adopt the Company’s Annual Financial Statements for the year ended 28th February 2018

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Appointment of Auditors

Ordinary Resolution 3

– Resolved as Ordinary Resolution 3 to appoint A&O Attest Services Incorporated as Auditors to the Company until the conclusion of the next Annual General Meeting

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11 August 2018 - AGM AGM 2018 2019/20 Budget Increase Over Forecast 2018/9 Forecast Increase 2017/8 Actual Increase 2016/7 Actual Income 2,969,725

3.1%

2,879,132

1.0%

2,849,551

0.6%

2,831,569 Standard Levy 2,389,725

4.2%

2,292,418

1.9%

2,249,352

1.8%

2,209,653 Interest 50,000

0.0%

50,000

(18.0%)

60,992

3.0%

59,223 Other Income 290,000

4.3%

277,965

8.6%

255,964

(12.7%)

293,327 Recoveries 240,000

(7.2%)

258,749

(8.6%)

283,243

5.2%

269,366 Operational Expenses ( Excl Capex) 2,361,629

6.0%

2,227,941

1.1%

2,203,147

(1.1%)

2,069,490 Admin and Auditing 187,316

5.0%

178,396

7.4%

166,050

1.7%

163,290 Employee Costs 1,056,371

7.0%

987,263

(5.0%)

1,039,069

2.5%

1,014,217 Motor Vehicle Expenses 241,500

5.0%

230,000

13.1%

203,434

(1.8%)

207,233 Repairs and Maintenance 183,750

5.0%

175,000

1.8%

171,876

63.7%

104,980 Utilities 418,700

6.0%

395,000

3.9%

380,222

(8.3%)

414,725 Insurance 71,992

7.0%

67,282

51.2%

44,502

(21.8%)

56,929 Bad Debt 50,000

0.0%

50,000

0.0%

49,985

Legal Costs
Other

152,000

4.8%

145,000

(2.0%)

148,009

36.9%

108,116 Surplus (Deficit) Ex Capex 608,096

(6.6%)

651,191

0.7%

646,404

(15.2%)

762,079 "Capex" 525,000

0.0%

525,000

5.5%

497,395

(20.0%)

621,372 Game 75,000

(40.0%)

125,000

(4.3%)

130,666

314.3%

31,542 Surplus (Deficit) 8,096

579.8%

1,191

(93.5%)

18,343

(83.2%)

109,165 Levy (Non-Res) 28,500

5.9%

26,900

6.5%

25,250

3.5%

24,400 Total Operational Expenses 2,961,629 2.9% 2,877,941 1.7% 2,831,208 4.0% 2,722,404 Detail

Summarized Forecast and Budget Income Statement

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Estimated Levy – 2019/2020

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2019/20 Projected Structure Rands Rands % Incr

ver

2018/9 2,877,941 2,961,629 2.9% Added Revenue 580,000 Services 290,000 Utilities 240,000 Interest 50,000 Adjusted Levy Calculation 2,381,629 Proposed Revenue from Levies 2,381,629 Levy per shareholder (Non Res) 28,403 28,500 5.9% Forecast Expenses - 2018/9 Budgeted Expenses - 2019/20 Total Levy

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Estimated Levy – 2019/2020

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Levy 2019/20 Non Resident 28 500 Resident 38 000 Old Syndicate 2 38 000 Old Syndicate 3 47 500 Old Syndicate 4 57 000 New Syndidicate of 2 57 000 Family Trust 1 28 500 Family Trust 2 31 350 Family Trust 3 34 200 Family Trust 4 37 050 Class of Shareholder

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Services Provision

4 main services

– House and Yard cleaning – Laundry service – Alarm monitoring – Repairs and Maintenance

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Current Charge (Ex VAT) Future Charge (Ex VAT) % Increase

Cleaning Normal 145 150 3.4% Deep Clean 290 300 3.4% Windows 145 150 3.4% Yard 145 150 3.4% Washing Per Load 145 150 3.4% Electricity Usage (Per Kwh) 2.20 2.20 0.0% Alarm Monitoring 2360 2400 1.7%

Service

Effective from 1 Sept 2018

Proposed Service Tariffs

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Note: Cleaning is for a MAXIMUM of 2 Hours

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Stakeholder Issues

Security (probably the biggest issue on the

farm)

– Reduction in Incidents in the last year – Additional cameras installed – Board still investigating new technologies of intruder detection

No economically viable solution yet been found

– Recommend that ALL Shareholders

Invest in radios
Install alarm systems
Be more vigilant

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Stakeholder Issues

Security

– Farm management belongs to Bulgerivier Patrol Group – Belong to Bulgerivier Whatsapp Group

Alerted to incidents in the area

– Regular police patrols inside the fence with flashing lights to show visibility of patrols – Regular monitoring of working condition of all installed alarms – For protection of all shareholders

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Stakeholder Issues

Communication

– Vote of Thanks to John and Lorna Hill for ogoing communication

Labour compliance

– Fully compliant with minimum wage as laid down by Dept of labour – Compliant with Workman’s Compensation Act

Other Compliance issues with regard to

various authorities all in place

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Stakeholder Issues

Introduction of Community Schemes Ombud

Service and Fidelity Insurance

– Added cost of ± R 50k per annum

Air B&B and Rentals

– Not permitted – Rules clearly state that cannot rent premises – Shareholder MUST be present

Privacy

– Please respect shareholder privacy and DO NOT invade their space at ANY TIME – adhere to “Private Road” notices

Fire Extinguisher Compliance

– Chat to Pieter

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Stakeholder Issues

Special thanks

– Sampie Stols

Various building assistance

– George Cochrane

Donation of additional feed

– Kowie van der Wath

Upgrading of photo’s in this hall

– Solly van der Wath

Further anticipation of restoration of the old Wind

Mill

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Corporate Governance

Corporate Governance

– Processes in place to comply with all corporate governance issues

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Special Resolution 1

The authority for Directors to buy back shares has to be renewed annually.

Resolved as Special Resolution 1 to authorise the

Board to buy back shares as they see fit and in the best interests of the company

The Effect of Special Resolution 1

– The effect of Special Resolution is that for each share thus purchased on auction as a result of default payments by a shareholder, that the issued shares would reduce by one and the Share capital would reduce by

R1000. The Purchase offer for each share will be taken

through the income statement as an expense.

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Special Resolution 2

The current definition of “Property and Buildings” in Clause 1.6.15
f the MOI is incorrect:
Resolved as Special Resolution 2 to authorise the Board to amend

the definition of “Property and Buildings” in Clause 1.6.15 of the MOI to read:

– “Property and Buildings” means the immovable property described below and known as “Hermanusdoorns” or “the farm”, together with the common use buildings erected on the immovable property. This excludes any buildings erected by the shareholder on the site allocated to the shareholder for the shareholder’s exclusive use:

The farm Hermanusdoorns NO 650 in the registration division KQ Northern

Province;

The remaining extent of the farm La Rive 592 in the registration division KQ

Northern Province;

The Effect of Special Resolution 2

– The effect of Special Resolution 2 is to correct the current definition

f “Property and Buildings” in the MOI

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Infrastructure and Asset management

Infrastructure improvement

– A continued focus – Start has been made on new dams

On Malembe side of the farm
To dam to “borrow pit” in Breekloof

– Increased intensity in Sekelbos clearing

Providing us with good supply of wood for Snoepie

– Installation of Water Meters

Water is Electricity – and therefore cost
Low rainfall has seen water levels drop
Will be monitored and if required, restrictions will be

imposed

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Infrastructure and Asset management

Vehicle management

– Vehicle policy implemented in 2013 showing dividends with vastly controlled expenses – Planned acquisition of a Landcruiser in 2019 to allow easy access to the mountain been delayed to 2020

Workshop Controls remain in place

– Continual investment in tooling to reduce costs of

ursourcing (Latest a hammermill)
Upgrade of old “rondavel” farmhouse complete

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Infrastructure and Asset management

Personal Residences

– Spot checks are made on the appearance and tidiness

f each shareholder property

– Please ensure that all houses are in a fit state of repair and react positively if requested to align with farm standards – Some are really below standard

Speeding

– PLEASE adhere to the limits AT ALL TIMES

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Director Retirement and Re-election

As per the MOI, two directors retire from office

and have put themselves up for re-election

This year they are:

– Dylan Harriss – John Hill

Done by ballot

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Fauna and Flora

A key focus of our medium term strategy

remains on Fauna and Flora

Poor rains over past years a concern
Costs of over R 80k on feed prior to expected

rains

Field management report complete

– Will determine game capture quantities in next month

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Rainfall History

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2000 2007 2014

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Fauna and Flora

Weed Infestation

– Controlled with pesticide – Good Results

Wildebeest

– Infected with Sarcoptic mange – Resolved

Sable

– 2 Heifers died – Replaced with additional 3 Heifers (all certified pregnant to join our three bulls)

Black Impala

– Donated

Springbokkies

– Originally experimented with 2 – Now added 14

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Fauna and Flora

Retention of memberships and active

participation in:

– Waterberg Nature Conservancy – Member of Lephalale FPA (Fire Protection Association)

Member of Welgevonden Sector

– Anti Rhino Poaching forum – Block Watch patrols

Private Water cribs

– please empty these so we can control grazing – especially at this time of year

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Game Count – best estimate

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Description Jun-11 Jun-12 Jun-13 Jul-14 Jul-15 Jul-16 Jul-17 Jul-18 Impala 135 140 155 120 120 140 180 250 Black Impala 1 1 Blesbok 9 8 10 14 14 17 20 26 Water Buck 25 27 27 28 28 29 30 32 Kudu 135 145 160 125 125 140 150 200 Giraffe 11 10 11 19 19 19 25 38 Bosbok 40 40 40 40 40 40 40 40 Warthog 40 40 40 40 40 40 40 50 Blouwildebees 33 30 32 38 38 43 44 32 Zebra 17 19 21 28 28 28 28 30 Gemsbok 7 7 7 8 8 8 8 8 Steenbok 16 16 16 16 16 16 16 16 Rooihartebees 27 27 30 31 31 31 31 20 Klipspringer 20 20 20 20 20 20 20 20 Mount Reedbuck 10 10 10 10 10 10 10 10 Eland 7 8 8 8 8 8 8 8 Nyala 6 7 8 15 15 17 20 35 Sable 3 3 3 6 7 Springbok 16

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IMPORTANT Stakeholder Responsibilities

PLEASE DO TAKE NOTE OF THE FOLLOWING EXTRACTS FROM THE RULES:

NO DOS ALLOWED
DON’T SPEED
Call the farm if you require services

– Sms and email unreliable

Quad bikes (in any form), motorbikes are prohibited
Drones are banned
Private generators are not allowed
Obey ROAD CLOSURES
Renting out of premises / unaccompanied visitors - Not allowed
DO NOT remove ANY wood from the farm or cut or prune trees

– if you need wood buy it from Snoepie

Continue with addressing Baboons – Salmon active
Maximum of 8 people per dwelling

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General

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General

Result of Directors Election
No Dogs allowed
Total Garage (Dave Goodyer)
To celebrate 21 Years as Shareblock

– Please join us for lunch

Next years AGM will be held on 10th August

2019 @ 11h00

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Closure

Thank you for your attendance and input
Vote of thanks

– to my co-directors (Attie, John, Clifford, Dylan and Michael) – the Financial Reporting Committee (Willie Botha, Attie and Christo), – the auditors (Christo) and – Special thanks to the Farm Management and Staff under the sound management of Pieter, but also to Salmon, Annatjie and Aniska

Please join us for a light meal directly after the